Japan, Vietnam firms ink billion-dollar gas power projects during Suga's visit
Oil and gas industry has been one of the top priorities in the bilateral economic relations.
Japan’s firms Tokyo Gas Co. and Marubeni Corp. and PetroVietnam Power Corp. signed two memoranda of understanding (MoU) to develop gas-fired power projects in Vietnam during Japanese Prime Minister Suga Yoshihide's visit to Hanoi last week.
| Representatives of the three companies shake hands in the presence of the two countries' PMs in Hanoi on October 19 |
In an MoU signed by Tokyo Gas Co., Marubeni Corp. and PetroVietnam Power Corp, the trio will start work on a 1,500-megawatt (MW) facility costing US$1.9 billion in Vietnam’s northern province of Quang Ninh.
The project, which is added to the National Power Development Plan for the 2011-2020 and vision to 2030, is scheduled for commercial operation in 2026-2027.
This is the first project in northern Vietnam using imported liquefied natural gas (LNG).
With the participation of Japanese companies, the project might get soft loans from the government of Japan.
Under another MoU, Marubeni will invest US$1.3 billion in O Mon 2 combined cycle gas turbine (CCGT) plant in Vietnam’s southern city of Can Tho.
The plant is expected to use roughly 1.25-1.4 billion cu.m gas per year from Block B off Vietnam’s shore.
The developers hope to get 80% of the total investment from loans secured by the Japan Bank for International Cooperation (JBIC), Nippon Export and Investment Insurance, and Asian Development Bank (ADB).
The 750MW gas-fired plant will be developed together with a Vietnamese partner, next to the existing O Mon 1 Thermal Power Plant, which has a capacity of 660MW.
Tokyo Gas, Japan’s biggest gas distributor, said last year it would increase investments in overseas infrastructure projects in LNG and renewable energy as part of efforts to grow its overseas earnings.
The company has expanded its business in Vietnam. In 2017, it acquired a 24.9% stake in gas firm PetroVietnam Low Pressure Gas Distribution Joint Stock Co., a unit of PetroVietnam Gas Joint Stock Corp. Under a strategic alliance, Tokyo Gas has helped expand sales to industrial gas users.
In the Vietnam visit, PM Suga met with Vietnamese Prime Minister Nguyen Xuan Phuc and agreed to increase cooperation on both economic and security.
So far, oil and gas industry is one of the top priorities in the Vietnam-Japan economic ties.
